The loser now may be later to win in the Covid-19 vaccine race as Novavax (NASDAQ:NVAX) approaches the finish line, making NVAX stock worth another (if speculative) look.
Unlike the mRNA vaccines produced by Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), Novavax is working on a more traditional protein-based vaccine.
NVX-CoV2373 was made by infecting moth cells with a modified spike protein. The same method is used to create vaccines for influenza.
It has taken time to design, create and test the Novavax vaccine, but it has shown up to 96% efficacy. It also lasts up to three months in an ordinary refrigerator.
The long winding road of the Novavax vaccine has delivered a stock chart for the ages. This includes two sudden drops of 30% or more, either when the company ran into trouble or Moderna and Pfizer saw success.
But those who speculated on NVAX stock in 2020 and hung on have been huge winners. You could buy Novavax for under $4 before the pandemic started in early 2020. It trades at around $266 today.
Those who were skeptical, as I was last November, lost out. But if you’ve been following my stories, you know I’ve changed my mind.
I called it a long-term buy in June. I suggested in August its “bronze medal” in the vaccine race might be good enough.
Novavax stock has yet to return to its all-time high of $290, in February. If you bought NVAX stock then, you are still in a losing position. But all the momentum seems to be going its way right now.
The Universal Booster
Novavax got $1.6 billion from the government’s “Warp Speed” program and now expects to apply for European Use Authorization (EUA) in the fourth quarter.
Veteran executives from Sanofi (NYSE:SNE) and Supernus Pharmaceuticals (NASDAQ:SUPN) have been recruited to get it over the finish line.
Novavax had never gotten a vaccine through a Phase Three trial before Covid-19 and has had trouble finding manufacturing partners. Those are now appearing.
Takeda Pharmaceutical (NYSE:TAK) of Japan has agreed to produce 150 million doses for distribution there as well as for export. Japan had been using an AstraZeneca (NYSE:AZN) compound and was buying mRNA vaccines from the U.S.
In addition to pushing the vaccine in developing countries where storage is a problem, NVX-CoV2373 is now being pitched as a “universal booster” shot.
Some analysts are coming up with other reasons for optimism. The company’s flu vaccine, dubbed NanoFlu, could be combined with its Covid-19 vaccine to set it apart.
At a market cap of just $17 billion Novavax stock also remains cheap, Covid-19 success could still make a difference for investors.
Because the Novavax vaccine isn’t based on mRNA technology, people who have been vaccine-hesitant might accept it, other analysts say. The development “platform” can also be used to quickly come up with vaccines that work against variants.
The Bottom Line on NVAX Stock
There are currently just three analysts at Tipranks following Novavax. All three have buy recommendations on it.
If you missed the boat on Moderna and BionTech (NASDAQ:BNTX), which developed the mRNA vaccines, you can still speculate on Novavax.
Vaccine hesitancy means the pandemic is going to stick around and booster shots may prove necessary.
There’s going to be a huge market for shelf-stable Covid vaccines well into next year. The prospect of combining influenza and Covid protection in one shot is also intriguing.
Don’t put all your money on Novavax. Buy a few shares when it drops, as it did in May.
Expect volatility, as we’ve seen over the last month. But it’s still small enough to be bought by a bigger player, and that might be the final payoff.
On the date of publication, Dana Blankenhorn held a long position in MRNA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
